Dr. Gavin Wood of Polkadot (DOT) Unveils $770 Million Development Fund As Anticipation for Parachain Auctions Builds
Interoperable and layer-0 blockchain protocol Polkadot (DOT) unveils a mammoth $770 million development fund ahead of the parachain auctions.
Polkadot Launches Development Fund
In a bid to bootstrap development and innovation in the DOT ecosystem, Polkadot founder and former Ethereum co-founder Gavin Wood has announced the launch of a development fund to the tune of $770 million.
The fund is being allocated by the Polkadot Treasury and, as such, comprises more than 18.9 million DOT tokens which will be disbursed via community governance.
In a tweet shared on October 17, Wood highlighted that the funds would be tapped toward “building, improving, educating” and anything else that the Polkadot governance believes valuable.
For the uninitiated, the Polkadot treasury funds are subject to council approval that periodically votes of proposals put in front of them. At present, the Polkadot council comprises 13 members although there are plans to expand the council to 24 seats in the future.
Notably, stakeholders who desire to put forward a proposal must reserve a deposit of a minimum of 5% of the proposed expenditure. This deposit can either be slashed (a burn mechanism to discourage validator misbehavior), if rejected, or returned if accepted.
Anticipation Builds for Polkadot Parachain Auctions
Speaking of Mr. Woods’ announcement, the timing of the grand reveal of the development fund is particularly interesting as Polkadot is currently preparing to undergo its first set of parachain auctions that will allow several projects to integrate with Polkadot to benefit from the latter’s governance, security, and decentralized mechanisms.
In a nutshell, the Polkadot parachain auctions will consist of a series of crowdloan campaigns where a number of parachain slots are opened to all projects to bid via DOT tokens. At present, 10 slots have been proposed to be opened from November 11.
Polkadot’s canary network Kusama (KSM) witnessed similar parachain auctions earlier this year and has, to date, auctioned more than 10 parachains to different innovative projects in the DeFi, liquidity bootstrapping, and NFTs landscapes.
As DOT tokens need to be loaned for 2 years to participate in Polkadot parachain auctions, it is speculated that parachains will exert a demand pressure on DOT tokens which could help propel its price to new all-time-high values.
At press time, DOT trades for $40.86, according to data on CoinGecko.